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Lessons from the Field
A Common Sense Approach to Success in the Hospitality Industry
By Dr. John Hogan, CHA MHS CHE, November 6, 2009

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Hotel Common Sense –

The Annual Review: Options to Avoid Struggling
to Measure Staff Performance
(Part 2 of 2)


By Dr. John Hogan, CHE CHA MHS, November 6, 2009

Measuring staff performance has been a challenge over the years for many hotel managers and supervisors.  Most people want to be fair and equitable in the evaluations for their staff, but I have discovered in my career as a manager, corporate executive and consultant that many organizations and individuals make it more difficult and less rewarding than it should be.  Common sense should prevail, but it too often becomes obscured in either meaningless bureaucracy or in a lack of planning, a lack of concern for staff development and a disregard of the cost of turnover. 

“Nothing astonishes men so much as common sense and plain dealing.” 
Ralph Waldo Emerson (1803 - 1882) American essayist, philosopher, and poet, best remembered for leading the Transcendentalist movement of the early 19th century.
As stated in part one of this series, I suspect many of us in our careers at some point have been in an organization that does not have a structured performance management plan.  Reviews may be conducted annually or provided sporadically, depending on the current executive’s leanings.    Some managers are unwilling to address poor quality performance, due to either through a lack of supervisory competence in delivering this kind of review or a lack of confidence in the system.

Part one identified a number of ways to assess performance at almost every level within a hotel structure, including:

1.  Forced Ranking systems that specifically rate and compare every person
2.  Management by objectives (a Peter Drucker-inspired method to focus on both long and short term activities and planning)
3.  Key result areas that focus on specific areas of measurement
The Harvard Business Publishing this week promoted a series of articles on “What Makes a Decisive Leadership Team, 3rd Edition1   There is discussion on “Bad choices. Endless bickering. Lost opportunities. Wasted time.”  and more that affect many organizations. The article analyzed that many teams stumble over common obstacles while making crucial strategic choices because they hit impasses that do not look beyond their own group's interests to see what's best for the organization overall.

Strategic management has always been important, but what has changed in the last generation (or less time) is the way in which value is being created in the new economies of information, communication, “instant everything” and the shift in manufacturing and services.
Today’s value drivers are intangible assets, including knowledge workers, technology, processes, and what is called today the “corporate culture”.  This evolved “corporate culture” must adapt to changes in the global market, but the creators of the The Balanced Scorecard believe that   7 out of 10 organizations do not have the management tools to allow them to do to execute a successful strategy to allow them to compete in the new markets. 

David Norton of high tech business and Robert Kaplan from the Harvard Business School developed The Balanced Scorecard in the early 1990s.  Its focus was addressing  the intangibles of a changing  economy that requires managers to look at relationships between today’s actions and their long term-impact. Many performance systems tie raises, bonuses or promotions to only financial benchmarks, yet the changing economy requires a balanced strategy between short-term productivity, mid term customer value, and long-term innovation. Things like customer retention, product or service quality as well financial measurements are now part of the equation of things to be measured.

We have all heard the maxim “What you measure is what you get.”  This is basically true – if we establish people targets or goals and reward them when they meet these targets, people will often do all they can to achieve them.

In hotels, this may seem like a fabulous theory, but it can be unsuccessful in practice if one does not set balanced measurements.  It is easier to measure financial results in ReVPAR, revenues, departments’ margins etc, than to gauge other essential areas, such as guest satisfaction, staff turnover, innovations in marketing, etc.  An over-reliance on financial goals means that people will disregard other meaningful areas of concern to meet the financial goals.  This can suggest that hotels or management companies often direct their efforts to short-term financial results, while undermining the “heart” of their hospitality business.

The Balanced Business Scorecard can be an important tool for improving the performance and accomplishments of an entire organization, a department, a team and individuals. 

For example, if you have an objective to decrease operating expenses in housekeeping by 8% or X dollars, you may set a goal to clean more rooms per day per room attendant. The financial target targets increased efficiency and lower cost, but if guest satisfaction declines as a result, this could lead to lost customers, reduced revenue, and so on. This action could also affect staff turnover, causing additional short-term and intermediate costs.  All of this yields the net effect that this well-meaning financial objective actually damaged the hotel's overall performance. When one achieves a goal in one area at the expense of operating performance in other areas, the results can be demoralizing.

Measurement Reinforcing Your Vision 

An internet search of the topic The Balanced Scorecard provided an excellent resource from a company called MIND TOOLS.  The reference noted ways to facilitate setting goals that provide appropriate weight to financial and non-financial measures by starting with the vision and strategy that drive the business. From there, one identifies the drivers of success for that vision, and then develops targets that measure progress towards that success. By focusing on these targets, your team will adjust its efforts to focus on the successful overall delivery of your vision.

Their research identified key factors that contribute to organizational success - known as Critical Success Factors - the Balanced Scorecard limits measurement to the things that really matter, which allow your company, hotel department or team remains competitive by examining both financial and non-financial measures, even if the non-financial activities have a less direct effect on the bottom line. 

Major Performance Areas for hotels include 

  • Financial Perspectives
  • Guest/Customer Perspectives
  • Business Processes Perspectives and 
  • Staff Development and Learning Perspectives.
The three assessment methods outlined in part one of this short series on performance each has its supporters and detractors, with various levels of success in the past 25 years.  A major challenge is that they often do not adequately make clear who is accountable for decisions, and without measurable accountability, cycles tend to repeat which in a changing world is not a successful strategy 
The Balanced Scorecard is currently used at a number of industries and varying sizes of companies.  I have personally been involved with the process and approach - it does take much of the other outlined approaches and combines the best of them.  Please contact me if I can be of service to you in refining the performance assessment at your hotel or company.

 1“What Makes a Decisive Leadership Team, 3rd Edition”     (HBR Article Collection)   by Bob Frisch, Paul Rogers, Marcia Blenko, David A. Garvin, Michael A. Roberto, Kathleen M. Eisenhardt, Jean L. Kahwajy, L.J. Bourgeois    44 pages. Publication date: Nov 01, 2008. Prod. #: 12186-PDF-ENG

What are you doing at your hotel today?


Feel free to share an idea for a column at johnjhogan@yahoo.com anytime or contact me regarding consulting, customized workshops, speaking engagements …………. 

And remember – we all need a regular dose of common sense.

Autographed copies of LESSONS FROM THE FIELD – a COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES can be obtained from THE ROOMS CHRONICLE www.roomschronicle.com,  www.smartbizzonline.com  and other industry sources. 

All rights reserved by John Hogan and this column may be included in an upcoming book on hotel management.   The opinions expressed in this article are those of the author and do not necessarily reflect the views of this publication

Expertise and Research Interest
• Sales Management and training
• Turn-around and revenue management
• Professional Development & Customer Service 
• Hospitality Leadership and Executive Education
• Making Cultural Diversity Real
• Accreditation & Developing Academic Hospitality programs

If you need assistance in any of these areas or simply an independent review or opinion on a hospitality challenge, contact me directly for a prompt response and very personalized attention.

John Hogan, a career hotelier and educator, is a frequent speaker and seminar leader at many hospitality industry events.  He is a successful senior executive with a record of accomplishment leading organizations at multiple levels.  His professional experience includes over 35 years in hotel operations, food & beverage, sales & marketing, training, management development, consulting, management, including service as Senior Vice President of Operations. 

As the principal in an independent training & consulting group, he served associations, management groups, convention & visitors’ bureaus, academic institutions and as an expert witness. He has managed hotels with Sheraton, Hilton, Omni and independents and in his tenure at Best Western International, he created and launched a blended learning system for the world’s largest hotel chain.  He has conducted an estimated 3,200 workshops and classes in his career, including service as an adjunct faculty member for 20 years at three different institutions. 

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Contact:

Dr. John Hogan, CHA MHS CHE
johnjhogan@yahoo.com

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Also See: The Annual Review: Options to Avoid Struggling to Measure Staff Performance / Dr John Hogan / October 2009
Hotel Common Sense - Recognizing the Many Ways to Reach and Influence Potential Guests / Dr John Hogan / October 2009
Hotel Common Sense - The Most Important Words for the Workplace / Dr John Hogan / September 2009
Hotel Common Sense - A Message to General Managers on Creating Successful Sales Management for 2010 / Dr John Hogan / September 2009
Hotel Common Sense - Understanding the Facts for Effective Hotel Sales Management / Dr John Hogan / September 2009
Hotel Common Sense - A Hotelier's Self - Assessment Quiz / Dr John Hogan / September 2009
"A Baker’s Dozen" of Strategies for Hotel Human Resource Managers & Directors / Dr. John Hogan / September 2009
A Baker's Dozen of Strategies in Maximizing Leads and Attendee Sales Potential at your Hospitality Trade Show Booth - part 2 of 2 / Dr John Hogan / August 2009
Increasing Traffic at your Hospitality Trade Show Booth / Dr John Hogan / August 2009
A Sales Self-evaluation test for General Managers / Dr John Hogan / August 2009
Hotel Common Sense – Effective Sales Management: Short and Long-term Planning, Forecasting, and  Expense Budgeting / Part 2 of 2 / Dr. John Hogan / August 2009
Hotel Common Sense – Effective Sales Management: Short and Long-term Planning, Forecasting, and  Expense Budgeting / Part 1 of 2 / Dr. John Hogan / August 2009
Hotel Common Sense -Recognizing There is More than One Approach to Ongoing Success in Building Revenues / Dr John Hogan / July 2009
Hotel Common Sense – A New Look at Awards and Recognition / Dr John Hogan / July 2009
Lessons on Brands and Discounting / Dr John Hogan / July 2009
Hotel Common Sense Using Business Social Networks Productively / Dr John Hogan / July 2009
A Common Sense Review Process for Capital Investments / Dr John Hogan / July 2009
Understanding Values: The Challenge to Identify and Keep Them During Tough Economic Times / Dr John Hogan / June 2009
Personal Stories of Delivering Hospitality and Pride / Dr John Hogan / June 2009
What is Your Definition of Leadership? / Dr John Hogan / June 2009
Examining Why Do We Really Do What We Do? / Dr John Hogan / June 2009
Delivering Hospitality and Pride / Dr John Hogan / May 2009
Act As if You Are Number Two / Dr John Hogan / May 2009
A Baker’s Dozen of Fundamentals for Retaining Quality Staff / Dr John Hogan / May 2009
Customer Relationship Management Requires a Blending of High Tech and High Touch for Optimal Results / Dr John Hogan / May 2009
Do You Know Where Your Customer Is? Or Knowing Where Your Business Originates / Dr John Hogan / April 2009
Understanding what we measure and making it count! Strategies for Hotel Controllers / Dr John Hogan / April 2009
“A Bakers Dozen” of Strategies for Hotel Controllers / Dr John Hogan / April 2009
A Different Appraisal of Our Biggest Challenges in 2009 / Dr John Hogan / April 2009
Reflections: Mentors and Friends - Vermont Hoteliers Borden and Louise Avery and their Son Allen / Dr John Hogan / March 2009
Remember to Embrace the Essentials in Sales; Revenue and net profits can often depend on how one of the most fundamental practices in sales- how incoming phone calls are handled / Dr. John Hogan / March 2009
Getting the Most Out of Your Hotel Franchise Investment; Working With Your Hotel Franchisor for Everyone’s Success / Dr. John Hogan / March 2009
Getting the Most Out of Your Hotel Franchise Investment; Evaluating the franchise business model as a potential franchisee / Dr. John Hogan / March 2009
Getting the Most Out of Your Hotel Franchise Investment / Dr. John Hogan / Dr. John Hogan / March 2009
Four Steps: How to Make More Sales Calls than Any Other Way Or Trade Shows Can Be Invaluable If. . . / Dr. John Hogan / February 2009
A Baker’s Dozen of Strategies for Hotel Chief Engineers / Dr. John Hogan / February 2009
"A Baker's Dozen" of Strategies for Hotel  Banquet Managers / Dr. John Hogan / February 2009
Making New Year's Sales and Marketing Resolutions Real and Practical / Dr. John Hogan / January 2009
Planning in a Challenging Economy - Probing Hotel Expenses / Dr. John Hogan / December 2008
Planning in a Challenging Economy - Fundamentals of Hotel Sales Planning / Dr. John Hogan / December 2008
A Message for Hoteliers: Giving Thanks - and Not Just One Day Each Year! / Dr John Hogan / November 2008
Hoteliers Must Remember the Lessons of Reasonable Care! / John Hogan / November 2008
Enthusiastic and Sincere Attitudes Will Pay Off For Hotel Salespeople / Hotel Common Sense / John Hogan / November 2008
Unleash the Potential! Recognize the True Value of Your Front Line Sales People / Hotel Common Sense / John Hogan / November 2008
Defining Hospitality - Readers Respond with their Insights / Hotel Common Sense / John Hogan / October 2008
Understanding the Value and Power of Breakfast / Hotel Common Sense / John Hogan / October 2008
A Bakers Dozen of Strategies for Hotel Restaurant Managers / Hotel Common Sense / John Hogan / October 2008
A Bakers Dozen of Strategies for Hotel Food and Beverage Directors / Hotel Common Sense / John Hoganv/ September 2008
My Definition of Hospitality. What’s Yours? / Dr. John Hogan / September 2008
Principles for Success as a Hotel Manager: 6 Observations on Finding and Employing Problem Solvers / Dr. John Hogan / September 2008
10 Hotel Sales Action Steps to Succeed in Today’s Competitive Marketplace / Dr. John Hogan / September 2008
10 Hotel Sales Mistakes to Avoid in Today’s Competitive Marketplace / Dr. John Hogan / August 2008
Ways to Identify and Build Repeat Guests / Dr John Hogan / August 2008
Principles for Success As a Hotel Manager - Maintaining Relationships Throughout the Organization / Dr John Hogan / August 2008
Principles for Success As a Hotel Manager - Part four: Communicating with Clarity and Candor / Dr. John Hogan / July 2008
Principles for Success As a Hotel Manager - Part three: Using your management style effectively / Dr. John Hogan / July 2008
Principles for Success As a Hotel Manager - Part Two: Motivating the Team / Dr. John Hogan / July 2008
Principles for Success As a Hotel Manager Part One: Understanding the Organization / Dr. John Hogan / July 2008 
Updating Hotel Marketing and Sales Strategies Mid Year NOW Is Essential / Dr. John Hogan / June 2008
Don’t Underestimate the Impact of the Hotel Sales Office / Dr. John Hogan / June 2008
Factors for Successful Interviewing Potential Hotel Sales Candidates / Dr. John Hogan / June 2008
The Importance of Meaningful Sales Team Job Descriptions / Dr. John Hogan / May 2008
For Hotels with Limited Service, Fewer than 100 Rooms - How Do You Determine if You Need a Person Dedicated to Selling / Dr. John Hogan / May 2008
Extending Your Sales Team or Make Travel Agents A Regular Part of Your Sales Programs / Dr. John Hogan / May 2008
Finding Business Leads Can Be Easier Than You Think / Dr. John Hogan / May 2008
Understanding the Differences Between Marketing and Sales / Dr. John Hogan / April 2008
Identifying Your Customers / Lessons from the Field A Common Sense Approach to Success in the Hospitality Industry / Dr. John Hogan / April 2008
...

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